Publications

Banking Perspective Q1 - 2014


Regulation and Resolution: Toward A Unified Theory

Single point of entry places bank holding companies as the source of strength for insured depositories and nonbank affiliates. As a result, a range of regulations may be redundant or have unintended cumulative effects. The current state of regulation should be carefully analyzed to avoid constraining economic growth.

by Gregory Baer, JPMorgan Chase

Resolving Financial Institutions: A Proposed Bankruptcy Code Alternative

Dodd-Frank gives regulators the power to resolve a failing bank using either the Bankruptcy Code or Orderly Liquidation Authority. Tension between these two approaches is complicating efforts to end “too big to fail”. Amending the Bankruptcy Code with key aspects of Title II could bridge this divide.

by Thomas H. Jackson, University of Rochester

Single Point of Entry – A Strategy to Resolve Large and Complex Financial Companies

The feasibility of single-point-of-entry recapitalization will depend on banks holding sufficient loss-absorbing, long-term debt. However, an incorrectly calibrated or unduly narrow requirement could be counterproductive and make SPOE more difficult.

by Rebecca Simmons, Sullivan & Cromwell

Multiple Point of Entry: The Forgotten Alternative

While single point of entry may be a preferred resolution strategy for certain banks, multiple point of entry may be more appropriate for those banks with a significant global footprint and many subsidiaries.

by James Chew, HSBC

Large Bank Resolutions: Toward a Preferred Path

Uncertainty about how the FDIC would apply the Orderly Liquidation Authority weakens the viability of post-crisis reform. The FDIC should build on its recent “Single Point of Entry Notice” by clarifying a “preferred path” for Title II resolutions.

by Randall D. Guynn and Reena Agrawal Sahni, Davis Polk

International Coordination and Cooperation: Progress and Challenges in Large Bank Resolutions

Though there is widespread agreement on the need for a viable resolution framework, overlapping authorities and legal confusion stand in the way of a cohesive approach. Regulators, banks, and other stakeholders must work together to craft a globally-viable resolution regime before it’s too late.

by M.P. Azevedo, PricewaterhouseCoopers

Certifying Continuity: The Role of Financial Market Infrastructures During Resolution

Financial market infrastructures are hubs that enable the global flow of capital. Maintaining their continuity in the face of a G-SIB’s failure is critical to sustaining economic stability. New rules promise to make FMIs more resilient while minimizing the chances that they could become propagators of financial stress.

by Thomas F. Huertas, Ernst & Young LLP

Departments

By The Numbers

A quantitative look at large bank resolution.

Featured Moments

Visual highlights from NURFS’s 3rd Annual Conference.

For The Record

In this issue, former FDIC General Counsel Michael Krimminger shares his thoughts on the importance of a workable resolution framework.

My Banking Perspective

REMOVE

Research Rundown

Highlights from academic and policy research on issues in the banking and payments industry.